The Supreme Court In a unanimous decision, the Supreme Court has overturned the Court of Appeal’s decision and restored the decision of the TCC: - Whilst the TCC and the Court of Appeal had interpreted the TR Paragraphs as a warranty that each of the foundation structures would have a minimum lifetime of 20 years, the Supreme Court was minded to give those paragraphs a slightly narrower interpretation requiring only that they be designed to last for 20 years. This narrower interpretation would allow scope for probabilistic failures of the kind envisaged by J101 (i.e. 1 in 10,000 to 100,000). It was ultimately unnecessary for the court to rule on this issue as either interpretation would have placed MTH in breach of contract: both are in the nature of fitness for purpose obligations which require the achievement of a result rather than the exercise of reasonable skill and care. - The Supreme Court disagreed that the TR Paragraphs were inconsistent with the balance of the contract. The court referred to a number of previous decisions in the UK and in Canada where contractors had accepted obligations to achieve certain performance criteria whilst at the same time agreeing to implement a certain design or specification. No inherent inconsistency arises where the performance criteria proves impossible to achieve if the agreed design or specification is to be adhered to. Whilst each case depends on its own facts, “the message from decisions and observations of judges in the United Kingdom and Canada is that the courts are generally inclined to give full effect to the requirement that the item as produced complies with the prescribed criteria, on the basis that, even if the customer or employer has specified or approved the design, it is the contractor who can be expected to take the risk if he agreed to work to a design which would render the item incapable of meeting the criteria to which he has agreed.” - The Supreme Court noted that the requirement to comply with J101 was expressed as being a minimum requirement and that MTH was obliged to identify any areas where a more rigorous design was needed. This would also have been the position even without express wording in this particular case. It could not have been envisaged that MTH would have been in breach of contract if it had sought to improve on the requirements of J101. There was therefore no actual inconsistency between the TR Requirements and the rest of the contract. - The Supreme Court also disagreed that the TR Paragraphs were insufficiently prominent or “too slender a thread” to support the more onerous fitness for purpose obligation alleged by E.ON. The court was particularly unimpressed by an argument that paragraphs such as these contained in a technical schedule should not be readily interpreted as imposing additional onerous obligations above those spelled out in the primary contract conditions. Given that the technical schedule in question had been given contractual force by the parties, it was to be taken at face value.